Study Shows that Working from Home Boosts Productivity

April 12, 2018

The concept of working from home has been a controversial issue among some employers for years. On the one hand, proponents claim that remote working can reduce costs while improving morale among staff. For its critics, though, the idea of working from home brings to mind images of employees who would rather lounge on a couch than do their job.

But according to a new study from Stanford, the former group’s assessment is likely the more accurate one. It all began when Professor Nicholas Bloom met James Liang, CEO of China’s largest travel agency and a student in Bloom’s graduate economics class. Although Liang’s company Ctrip had grown to employ more than 16,000 people, turnover at the Shanghai-based business remained extremely high. With much of its staff living in the suburbs, many employees eventually grew tired of making the long commute into the city. Coupled with the astronomical price of office space in Shanghai, Liang wanted to develop a work-from-home program but feared that productivity would plummet as a result.

So rather than take any risks, Liang asked Professor Bloom to study the potential effects that this change could bring. Bloom randomly selected 500 employees and split them into two groups, with one continuing to work at company HQ while the other voluntarily worked from home. After two years of study, he concluded that the telecommuters displayed a boost in productivity equivalent to a full day’s work. Instead of being more distracted, Bloom found that these employees were more likely to work a full shift than their office-bound counterparts. After all, employers don’t have to worry about telecommuters arriving late or leaving early. The work-from-home group also took shorter breaks and had fewer sick days than their colleagues, not to mention that Ctrip saved $2,000 per employee on rent by reducing office space. Still, Bloom says that more than half of the telecommuter group did not want to work from home at all times, with many claiming that they felt “too much isolation” after a while.

Questions:

  1. What are the advantages and disadvantages of working from home?
  2. Should more companies follow Ctrip’s lead and create their own work-from-home programs? Why or why not?

Source: Scott Mautz, “A 2-Year Stanford Study Shows the Astonishing Productivity Boost of Working From Home,” Inc., April 2, 2018. Photo by David Mulder.

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